V@ update - February 2021

Welcome to the February 2021 edition of RPC's V@, an update which provides analysis and news from the VAT world relevant to your business.

News

• HMRC has published guidance on how UK businesses registered for VAT that are claiming a VAT refund in another country can ask HMRC for a certificate of status to confirm they are trading in the UK. Read more

• HMRC has published a consultation on VAT and value shifting, which seeks views on a proposed revision of the rules for apportioning the consideration between supplies with mixed liabilities in a single transaction. The consultation will be of particular interest to businesses that sell goods or services for a reduced price as part of a package or 'bundle'. The consultation closes on 30 March 2021. Read more

• HMRC has published a policy paper in which it confirms that after receiving representations from businesses and their representatives, it has decided to apply the updated VAT treatment set out in Revenue and Customs Brief 12 (2020): VAT early termination fees and compensation payments from an unspecified future date. HMRC has confirmed that it will shortly issue revised guidance and a new Revenue and Customs brief to explain what businesses need to do, which will include guidance on what to do if they have already changed how they treat such payments
  because of this Brief. Read more

• HMRC has updated Energy­saving materials and heating equipment (VAT Notice 708/6), which provides guidance on how to account for VAT for contractors and subcontractors installing energy­saving materials and grant­funded heating equipment. Section 2.17 of the notice has been amended with updated information about air source heat pumps. Read more

Case reports

Healthspan ­Tribunal applies KravVet in deciding that goods fell within Article 33 of the Principal VAT Directive 

In Healthspan Ltd (2) v HMRC [2020] UKFTT 509 (TC), the First­-tier Tribunal (FTT) considered whether goods ordered by internet and by post, which were delivered by post (the relevant goods), were within Article 32 or Article 33 of the Principal VAT Directive (the PVD), in the light of the findings of fact set out in an earlier decision of the FTT in this case, and the guidance provided by the judgment of the Court of Justice of the European Union (CJEU) in KrakVet Marek Batko sp.k. v Nemzeti Adó­ és Vámhivatal Fellebbviteli Igazgatósága (Case C 276/18) (KrakVet). Read more

News Corp ­ Court of Appeal decides that digital news services were not zero rated

In HMRC v News Corp UK & Ireland Ltd [2021] EWCA Civ 91, the Court of Appeal considered whether, in the period from September 2010 to December 2016 (the relevant period), digital editions of certain newspaper titles (the digital news services) published by News Corp UK & Ireland Ltd (News UK) were zero rated for VAT purposes. Read more

Conservatory Roofing Systems ­ Tribunal decides that a company's supply of an insulated conservatory roof system did not qualify for a reduced rate of VAT

In Conservatory Roofing Systems Ltd v HMRC [2020] UKFTT 506 (TC), the FTT held that the supply of an insulated conservatory roofing system was a roof conversion and therefore did not qualify for the reduced rate of VAT but was instead standard rated for VAT purposes. Read more